Loro VS esse / essi
What is the difference between "loro" and "essi" or "esse" (and what's the difference between the last two)
The "correct" subject 3rd person pronouns would be:
- Egli (he)
- Ella (she)
- Esso (masculine it)
- Essa (feminine it)
- Essi (masculine them)
- Esse (feminine them)
However, in modern Italian, these pronouns have become literary or very formal and aren't commonly used in speech, in favor of lui (he), lei (she) and loro (them). "It" isn't currently associated with any pronoun, and is commonly omitted or referred to indirectly.
In the example above he and she are subjects in English, they would be a subject too while them is a direct or an indirect object in English.
You are right that loro can be used as a subject and an object in Italian. Usually li/le (direct object) or gli (indirect object) seem to be used as objects though.